Date
13 December 2017
Hongkong Garden was launched in 1985. The last unit was completed after 31 years and fetched many times what it would cost then. Photo: HKEJ
Hongkong Garden was launched in 1985. The last unit was completed after 31 years and fetched many times what it would cost then. Photo: HKEJ

31 years in the making and then a killing

Hong Kong property developers are probably the most efficient money-making machine in the world.

They often recoup their investment years before delivering a single home.

A developer once compared the operation to baking in an oven — it’s easy to turn flour into bread.

The trick is to sell a few hundred units in a few hours and almost all developers have it up their sleeves.

So it comes as a surprise that it took Chinachem Group 31 years to complete its last unit in Hongkong Garden in Castle Peak Road. That’s something for the record books.

Sales director Ng Shung-mo is justifiably ecstatic at the completion of the historic mission. The late Nina Wang, once Asia’s richest woman, was still running the private developer when it all began.

On June 10, the top-floor flat with a balcony was sold for HK$19.91 million (US$2.57 million), or about HK$14,000 per square foot.

Interestingly, the agent for the deal was not even a broker yet when the first unit in the estate was sold. He probably was still in primary school. 

Launched in 1985, Hongkong Garden is a 28-tower residential bloc consisting of 2,830 apartments, mostly two to three-bedroom units developed in three phases.

But Chinachem, with unusual patience, sold the flats over different boom-and-bust cycles that included the 1987 stock crash, the Asian financial crisis in 1997-98, Sars in 2003 and the global financial crisis in 2008.

It’s difficult to chase down the prices for these units after all these years but it should be a fraction of today’s prices (a two-bedroom flat in Taikooshing debuted at HK$400,000 in 1986).

Going through the Centanet transaction records, we found that a two-bedroom unit in Tower 5 changed hands for HK$600,000 in 2003, or about one-sixth the price for the same unit sold last year for HK$3.55 million.

The holding period for these flats is just amazing.

Imagine someone who fancied a flat 30 years ago but could not afford it and being able to buy it now that he has all the money.

Then imagine how Chinachem must have made a killing simply by being patient. 

The whole thing reinforces a simple business axiom: Hong Kong developers always make money, more so as times goes by.

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JT/AC/RA

An EJ Insight contributor

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